« Start new Comparison

Car Buying Scams to Avoid

February 5th, 2014

Alright, I’ll admit it—the title of this blog post is totally misleading. The truth is that we advise you to avoid all car buying scams. I’ll even be so bold as to say that you should try to avoid car scams whether you’re buying, selling, or fixing your car. But I don’t need to tell you that.

Car Scams

Although automotive marketing and advertising tactics are becoming increasingly insidious, some car buying scams still stand the test of time and continue to trick buyers into unfavorable contracts. If you’re car shopping, it’s always good to refresh your awareness of classic car scams. After all, knowledge is power. In order to help you get that power, True Consumer Reviews presents: Car Buying Scams to Avoid.

The Too-Many-Stickers Scam

There is one sticker that you should always see on a window when you’re car shopping, and that is the sticker that verifies the price of the car. Often times there is a second sticker with a lot of fine print detailing all of the charges you will incur for expensive add-ons you don’t need or want. There’s a third sticker you might also find–one that reads, “ADM.” ADM stands for “additional dealer markup” and is just the dealership’s way of adding on more charges for their sales services. You can be upfront about your refusal to pay an ADM and unless you’re lucky enough to be buying some hot new sports car, you can usually get the charges dropped.

The Foursquare Scam

If you’re sitting down with a dealer working out the finer details of your soon-to-be new car and the salesperson starts doodling a cross-section to create four squares on a piece of paper, do yourself a favor and step out for a cup of coffee to collect your thoughts and slow your mind. “Foursquare” is a sales method that assumes the buyer will only focus on the details of one of those squares, leaving the other three to be fully manipulated by the seller. Don’t communicate via foursquare–it’s a losing game. Ask for the same information in a list format instead.

The Qualification Requirement Scam

If you’ve ever been in the market for a vehicle you’re probably familiar with the phrase, “for qualified buyers only.” And if you have reasonable assets and credit, it would seem reasonable to think that you are a qualified buyer. Sorry to break it to you, this isn’t how it works in the game of car sales. Qualified buyers are more often than not characterized by a near-perfect credit score, and if you’ve got even the smallest blemish you’ll be making up for it with a more expensive contract. Shop around for a loan before you shop around for a car so you can be prepared to hold your ground when offered applications for loans from dealerships.

The “E-Filing” Fee Scam

Short and sweet: Some dealers will try to charge you for doing business electronically, even though it makes it easier for them. Refuse to pay any “e-filing” fees upfront. It’s a fabricated expense to boost commission.

The Negative Equity Scam

If a car dealer offers to pay off your existing loan so that you can enter into a new contract with their dealership, run for the hills. This car buying scam is older than your college debt. If the phrase “negative equity” comes up it means they’re trying to get you to agree to pay more than the car is actually worth, then you’ll wind up overpaying for two cars (rather than the one you’re already probably overpaying for). Would your friend ever try to prusuede you to borrow his money? Nope. Don’t forget: Your car dealer is not your friend.

The Spot Delivery Scam

Sometimes high pressure car dealers don’t seem like high pressure car dealers. Instead, they seem like regular, laid-back, fun-lovers who just want you to get what you want. They break the rules a little. Maybe even tell you an embarrassing story about their boss. It’s ok to pander to salespeople and even enjoy their performances, but it’s time to start drawing some boundaries when the rules start breaking for you. Anything that happens informally, like taking the car home without signing the papers, is likely to work out in the favor of the dealership. The spot delivery scam is aimed at people with poor credit who get swept away in the glory of newness, only to find out their application wasn’t approved and they will have to pay rates they can’t afford. Stick to the rules and don’t let this happen to you. Also see: The Honest Car Salesman Scam.

The Bait ‘n Switch Scam

The bait ‘n switch scam is designed to get you out of your house and into the dealership to be preyed on. When you see a car lease advertised in the newspaper for $69 a month, it’s pretty likely someone is pulling a bait ‘n switch scam on you, and when you show up on the lot to cash in on your great deal they’ll say they already sold out of that model due to the popular low pricing. However, they’ve got a slightly more expensive car for you right around the corner. Don’t fall for it! Ignore sensational advertising from the get-go.

The Honest Car Salesman Scam

Okay, okay, so not every car salesman is wearing a plaid jacket and push-broom mustache. Some of them are wearing H&M for Men suit jackets, graphic tees and Sketchers. But just because the guy talking to you about the car is talking like you doesn’t mean you should trust him. Much like the salesperson behind the spot delivery scam, the “honest” car salesman will try to show you he’s on your team and looking out of your best interests. Maybe he divulges some inside information about one car you’re looking at then directs you to another (more expensive?) vehicle that he thinks suits you better anyway. If someone is going out of their way to show an alliance with you, there’s a good chance a scam is hiding behind that alliance.

What kind of scams have you faced while car shopping? How did you know they were scams? Leave your stories in the comments section!